June 27, 2004

The deteriorating law and order situation, poor infrastructure and bureaucratic hurdles make Pakistan a problematic country to deal with in the eyes of investors

An informal chat with overseas Pakistanis, a chance meeting with foreign nationals on business trips to Pakistan and tourists reveal how badly Pakistan is out of step with its image abroad. These people were generally kind and generous with their time, which made it was easy to understand their views on Pakistan’s changing political, economic and social landscape. A relatively clear picture emerged as to where the country and its people are. I have, on my part, made a conscious effort not to let my personal evaluations reflect in this piece and to put things as I have understood them.

While these visitors praised the appearance of airports in the major cities of Pakistan, the growing fast-food industry, increasing employment for women, the boom in the construction industry, the new look of gas stations, the emergence of Internet cafes, well-stuffed shopping malls, increase in the use of cellular phones, imported buses, fancy cars, cable TV networks, etc, they were critical of the measures taken to address poverty and unemployment.

Such developments, they say, merely lends a false sense of stability in society. They felt that there has hardly been a legitimate effort to purge ignorance, pauperism and crime, and had fears that if such a situation prevails in the country and fails to address the conscience of the majority, then it not only reinforces socio-economic divisions and aggravates conflicts but also puts a direct premium on efficiency and crime. There was a consensus of opinion among them that the growing wealth and affluence enjoyed by a relatively small percentage of politico-military-commercial elite is widening the gulf between the haves and the have-nots, and this gulf appears to be unbridgeable, at least for the time being.

The development paradigms holds that market-oriented economic policies and the rule of law are all that matter for economic progress, but weak political institutions hardly suffice to foster growth. There are no signs of good governance due to clogged agendas, a formidable barrier that has blocked progress and brought about an obvious decline in the working of key national institutions. Rural poverty has forced people to migrate to the more prosperous urban areas. Institutional weaknesses and limited urban resources have failed to cope with the urban explosion. Electricity and water shortage have increased and sanitary services have become poor. The gap between demand and supply is enormous, as state revenue has not grown as rapidly as needed, aggravating the misery of the common man.

The constant increase in the prices of essential items has considerably reduced the disposable income of people with limited resources. Lower demands have translated into overflowing of warehouses, which has reduced output of manufacturing lines resulting in job cuts. This has increased unemployment, educational and income inequality.

Growing poverty and the utter absence of social amenities stirs the feeling of unfortunate limitation and perhaps goes on to put a premium on greed, impudence and cruelty. Resentment resulting from lost economic opportunities and problems of social injustice manifests itself in ethnic and religious intolerance, and breeds crime. “Every time that I am here, I am tense. This may be hard for a Pakistani to understand, but I know what I am talking about. You can take my word for it,” a white-collar executive stated. He went on to say, “You have all become so accustomed to these things that you accept it as standard operating procedure.”

In recent years, Pakistan has taken steps forwards and backwards in national development, but the most glaring lapse was not to operate as an economic island. Foreign investment, therefore, is not coming into Pakistan the way it should. Investors abroad are skeptical about the way the economic reforms are implemented in the country. The deteriorating law and order situation, poor infrastructure facilities and the ordeal of coping with tons of paperwork due to bureaucratic hurdles make Pakistan a problematic country to deal with in the eyes of investors. The investors now have several other options available for investment, e.g. South-east Asia, Latin America, etc, and it is now up to the government to take adequate measures to arouse the investor’s interest so that the potential investors don’t shy away with investments in Pakistan.

No matter what the officials say, the democratic credentials of the government and present economic policies, for sure, are fraught with controversy as human sufferings have increased manifold. There is an urgent need to examine things that are keeping Pakistan in a state of apoplexy. The sad realities must be candidly confronted. The consequences of casually responding to grab a fire hose while the house is burning are too often disastrous. National interest is supreme and leaders, economists and sociologists are expected to come forward, open up their hearts and discuss and debate core issues openly, without fear of repercussions. Finding shortcuts, proposing symbolic changes, coming out with ceremonial and cosmetic answers or clinging to old ideas and strategies that have not worked or may have worked at another time, but now no longer apply, will not serve the purpose. Classic examples of how China, Malaysia or for that matter Singapore have pooled resources, developed and build their economies and communities should provide inspiration and guidance in formulating strategies to reverse the tide of past follies and negligence in respect of economic ills and social agendas. To get the desired results, the challenge of going beyond the common comfort zone must be accepted to put Pakistan back on the tracks.

While Pakistanis, who are settled abroad and have managed to elevate themselves occupationally, are more than willing to return and contribute to national development, the circumstances in the country are holding them back from doing so.

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